If the Fed Increases Interest Rates in the U

Multiple Choice

If the Fed increases interest rates in the U.S. relative to other nations,

A) foreign investors are likely to transfer funds to U.S. investments.
B) foreign investors are likely to reduce their investment in U.S. securities.
C) foreign governments will likely reduce their interest rates further, to remain complementary to what the U.S. is doing.
D) foreign investors will see this as a sign of a looming recession and redirect their funds to time deposits.